February 01, 2006

A Catholic Alternative...

A talk given by Jennifer Roback Morse on January 21 for the Acton Institute Lecture Series Commemorating the 15th Anniversary of Centesimus Annus at the Pontifical North American College in Rome:

So the European social model provides high wages and excellent benefits -- for the few who have jobs. The system excludes those who are not skilled enough to be economically productive. But everyone begins their lives being not very economically productive. In practice, this means that the young are kept out of the labor market precisely at the time they are most biologically suited to begin forming families. It also means that those who are intrinsically poor, due to disability or low intelligence, are also excluded from participation in the labor market.

The welfare state has also contributed to the marginalization of marriage. Living with parents is not conducive to starting a family. Age at first marriage is an important determinant of family size: A person who gets married at the age of 35, is not going to have as many kids as one who marries at 23.

But this is not the only impact of the social assistance state on fertility and marriage. The life-time assistance of the state displaces the economic function of the family. The elderly don’t need adult children to support them in their old age. Women don’t need a husband to support them if they do have a child. Husbands become a nuisance, because the government will provide financial benefits without the inevitable difficulties of dealing with a flawed human being as a partner. In this environment, children become consumption goods, an optional life-style appendage to acquire only if one happens to enjoys children.

The social model’s attempt to offset declining fertility levels by increasing family allowances has not succeeded and is not likely to succeed in the future. The range of government benefits offered to families is truly staggering. Among the EU countries, parents receive benefits for their children, allowances for a parent who has ceased or reduced employment, single parent allowances, new school year allowances, and housing allowances.

Actually, the part of the talk published so far only covers the problems - the proposed alternative will be published later.

It's our big cities as well. The only neighborhoods with steady or increasing numbers of new babies are those generally considered The Hood. Consider my own City With All Its Works/Pomps. With thriving Center City- downtown region with successful restaurants, high-end retailers, nightspots. Growing population of full-time residents- people under 30. Gay and lesbian couples. Seasoned citizens whose children left them for large empty houses. Virtually all of them childless and may I add fair of skin. Surrounding neighborhoods have law-abiding citizens living in abject fear. With a popular form of apparel being the 'Stop Snitchin' t-shirt- urging residents not to consult police upon discovery of illegal activities. Increasing parallels between this and other major U.S. cities and those in Europe. With resulting social fallout.

Well, it's difficult to comment, without knowing what this author is actually proposing. As many people tell the Democracts in the US: we know what you are against, but what are you for?

A few basic points:

* There is no single European social model. There are indeed major differences between the Anglo-Saxon model, Nordic model, Continental model, and Mediterranean model (see a recent paper by Andre Sapir for details).

* Some models work, others don't. In particular, the Nordic model is capable of delivering high rates on employment (at least as high as the US) while at the same time guaranteeing a more equal distribution of income, and negligible poverty. It does this by combining generous social benefits with strict eligibility, and insists of activation measures for the unemployed. It eschews labor and product market barriers. Nobody promotes the "Dutch model". Perhaps the author should look into the Danish "flexicurity" model, which is the latest fad (and seems to work along the lines described above).

* Europe shows that a cooperative approach to labor relations can work well. In some countries, agreements between unions, employers, and government has led to prudent wage growth, fiscal probity, and high employment growth. I'm talking mainly about Ireland and the Netherlands. This type of "corporatism" is well grounded in Catholic tradition.

* Many of the problems with labor market outsiders are very real ones, but are not problems everywhere. The real problems are in continental and southern Europe.

* On fertility rates, the author does not mention that there is a positive association between fertility and the provision of benefits condusive to child bearing. See the OECD literature on this area. Factors such as maternity leave, childcare benefits, and tax individualization (which lowers marginal rates on the second earner) all contribute to fertility. If you look at the numbers, fertility rates are highest in the Nordics, and lowest in countries like Italy and Spain-- precisely those countries with the lowest benefits.

* None of this is to deny that Europe has some serious problems. But I would still contend that it has many advantages over the United States, especially in terms of outcomes-- poverty, health care access etc. Perhaps the Acton Institute should figure out a Catholic solution to America's social problems first!

Comparing the US to any of the Northern European countries is like comparing apples to oranges. Size, terrain, demographics, diversity: Everything is different. What works in Norway might work in Rhode Island or even Colorado. It can't work for the whole continental United States. Which is why we need not just a Catholic model, but a Catholic model designed to work in America.

As the Holy Father cautions us in Deus Caritas Est, when we walk by faith using the church's social doctrine for guidance "Faith enables reason to do its work more effectively and to see its proper object more clearly." As citizens of any nation, we Catholics (*) in expressing our political will must first form our consciences in conformity with that 'proper object'. May I humbly suggest that in the spirit of "Ubi Caritas Deus ibi Est" that Big Business is just as dangerous to the social fabric as Big Government, requiring a social secuity net to catch its victims?

Acton himself quoth that beloved pithy one liner "Power corrupts, absolute power corrupts absolutely." Gloria L. Zúñiga describes good corporate citizenship in her Acton article "What Is Economic Personalism? A Phenomenological Analysis" at

http://www.acton.org/publicat/m_and_m/2001_fall/zuniga.html

recounting the tale of Continental Airlines first told in the 1998 book "From Worst to First". But beware - for every great story there's always the evil couterpart, read Monday's NY Times article by Ben Stein
http://www.nytimes.com/2006/01/29/business/yourmoney/29every.html?_r=1&oref=slogin

on the nanny state's handouts to the management of United Airlines "When You Fly in First Class, It's Easy to Forget the Dots" before critiquing other models of social security. If you don't get what JPII personalism has to do with "dots," go rent the movie "The Third Man" .

God Bless
Clare Krishan

(*) I'm a legal alien born of one northern European state who earned her social security entitlements and corporate pension benefits in another norther European state working for a Northern American multinational corporation claiming a 100% rating on the HRC report (Human Rights Campaign, an association promoting US gender equality) while operating a significant portion of their corporate undertakings in a Northern Asian state that requires employers to comply with "social security" record keeping of the menstrual regularity of their female employees so as to determine when birth control penalties need to be exacted (a.k.a. forced abortions). My stock options are still worthless (unexercisable since the stock is worth less than when the options were issued) years after the mega merger with another North American corporation. Meanwhile my state benefits are as valuable as the fertility rates of those who're going to be working to pay me - and as a previous poster mentioned - as along as "Gastarbeiter" from Turkey, Morocco and Tunisia keep having tax paying babies I'm not complaining. (It is of course my heart's desire that these brothers and sisters experience "the newness of biblical faith" and understand revelation as incarnation, but that's in God's hands not mine nor the states)